Q&A · 3:23:09-3:26:36

Asteroid gold, national debt, and Suez

Even imaginary wealth must enter the economy gradually, but sustained debt relief could alter Britain's postwar power and the balance behind the Suez Crisis.

Question

Why could rapidly repaying Britain's debt be harmful in the asteroid-gold scenario?

Short answer

It could disrupt creditor income and the wider economy, so repayment would need careful timing even with the imagined windfall.

Notes

In the asteroid-gold scenario, rapid debt repayment could disrupt the interest income that creditors expect to receive. Banks use income from lending to pay savers, so a repayment on this scale could unsettle the American economy and spread disruption to other countries. A proposed British response is to judge the timing carefully while using the windfall to support Commonwealth economies through generous loans. The intended result is equal footing with the United States while preserving the alliance. Greater financial independence and a stronger fleet would also change Britain's bargaining position during the Suez Crisis.